10 rules of engagement when pitching to an investor

Pitching to investors is important phase entrepreneurs go through in order to make their dreams, vision and aspirations a reality.

The ultimate goal is to get investors who will be valuable partners in your business, offering the necessary capital, guidance, and connections that your company will need to grow. But it is a delicate process.

However, the determination to be memorable is the key to success at every pitching event. And just as every startup is unique, every pitch should be unique as well, but there are some distinctive do’s and don’ts which should be put into consideration when pitching to investors.

1. You must talk about the problem/solution fit

As an entrepreneur pitching to investors, you have to talk about your product/service/business in details. You have to define what you do. What do you do? What problem are you trying to solve? Why do you think what you have is the best solution to the problem? etc. You have to make these points to your potential investors. You have to show them that you know the market and the competitive landscape. Show them you have great insight into market activities and that you have considered all possibilities.

According to the interactive event app (which allowed investors to submit questions and vote) at least half of the startup pitches didn’t communicate clearly what they do. Top of the feedback was “I don’t get it.” Often the judges didn’t get it either and had to ask in the Q&A.

The size of the problem you solve and how well you solve it creates the value in your business. There is simply no excuse for not being able to pitch coherently the problem you solve and how you solve it in one minute let alone three minutes. Hence, you have to communicate these basics effectively.

2. Don’t speak hastily, be audible and articulate

Slower speech will help with clarity if you have a strong accent. There are lots of great resources to help you improve your speaking; this is one of many. Meanwhile, if you feel that you’re talking way too slowly, you’re probably speaking at about the right speed.

3. Answer questions with confidence and precision

After all all your talk about what your product, the investor also has his time to make clarifications on issues he doesn’t seem to comprehend and that is the time for questions.

This is a very delicate time as the responses provided and composure during that period can make or mar the entire pitch. So as an entrepreneur, ensure you confidently provide precise and accurate answers whenever you are asked to make any clarifications.

4. Tell a story

During your pitch, ensure you include some engaging story line in order to get the attention of the investors, to trigger their curiosity and to make them remember your pitch through the story.

Try not to be boring and make your pitch alive. Don’t include the bedtime story telling kind of stuff, instead provide a story with context that will stimulate curiosity. Remember, the aim is to make it a memorable one for your prospective investors.

5. Ensure you talk about the investor’s exit

Another point, which is perhaps the most important point is the investor’s exit. Too many startups are focused on their business plan and the potential future for their business ideas, but fail to foresee the outcomes for the investors. From the investor’s perspective, that is what is important to him and what he is expecting to hear from you. Don’t forget to give them what they came for!

6. Don’t tell a lie

You have to be realistic and honest. Either about your product, business model, a risky path, data or even figures. You have to stay true to your startup values no matter what – it is non-negotiable. Exaggerating the case may work in the short-term as you may get some cash, but in the long run, you will suffer immensely for it.

7. Use the appropriate speeches for the right situation

There are 3 types of speeches everywhere entrepreneur must have: elevator pitch (45s – 1 min), short pitch (5 – 10 mins), and long pitch (more than 20 min). Always having these speeches prepared will do you a whole world of good wherever you find yourself. Such that in the event of an impromptu scenario, you still have something well thought out to present.

8. Be mindful of your body language

You will do well to ensure that whenever you are before potential investors, your body language and words do not mean different things. Ensure that when your words say one thing, your body is also saying the same thing.

9. Don’t ignore your competitors

Try not to live in denial of your competitors. Even an investor knows that competition is part of business. Pretending you don’t have any, or that they don’t matter, is a sign of inexperience and overconfidence which could be disastrous.

Be prepared with detailed information about your competition: who are they, what is their size, their growth, their market share, their weakness, their strength? How are they like you and how are they different?…But most importantly, what is your competitive advantage over them?

To your investors: show how you will convince customers to come to you instead of to your competitors.

10. Do talk about how great your team is

Investors trust great teams and are more likely to get interested with your startup of they see the potential of a team built on togetherness by a great leader.

Investors are not just showing a commitment to your idea. They are investing in you and your people. Show them that you are behind your people and they are behind you every step of the way.

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